While there are multiple scenarios for WBD’s future, including a whole-company acquisition by PSKY or a structural engineering combination by CMCSA, BofA highlights the unique strategic leverage afforded to Netflix. The report asserts an acquisition by Netflix could potentially be “killing three birds with one stone,” with WBD the latest must-have asset in the competition once known as “the streaming wars.”

A crown-jewel studio

The intense interest in WBD stems largely from the scarcity premium commanded by its primary asset: the Warner Bros. Studio. WBD’s intellectual property (IP) library, ranging from Harry Potter to DC Comics to Game of Thrones, makes the studio a “crown jewel” asset, BofA said, with one of—if not the most valuable—content libraries in the world. BofA analysts, led by senior media and entertainment analyst Jessica Reif Ehrlich, estimated the takeout value of the consolidated WBD at approximately $30 per share. (It was trading slightly above $24 at press time.)

Netflix’s reported focus is specifically on WBD’s studio and streaming assets, a deal likely to be valued at more than $70 billion. For Netflix, this would represent a significant pivot from building original franchises to buying established “franchise moats.” While Netflix is the undisputed leader in streaming subscribers, it has historically lagged behind other media companies in deep IP libraries that offer potential use cases for theme parks, gaming, merchandising, and Broadway shows.

Building a franchise like Harry Potter “takes a significant amount of time and investment,” BofA notes, while buying it would provide immediate, low-risk engagement, with significant upside from potential reboots, prequels, or other franchise extensions.

“Warner Bros.’ library offers a depth that Netflix cannot replicate organically within a reasonably short time frame across several pieces of IP,” BofA writes, but more important, it would be a death blow to all of Netflix’s rivals given this IP would complete the Netflix arsenal. “If Netflix acquires Warner Bros., the streaming wars are effectively over,” Ehrlich’s team wrote. Here’s how the birds would fall to the ground if Netflix were to fire its money cannon at WBD.

The triple kill: Consolidating power

The first “bird” killed by a Netflix acquisition would be WBD itself, as its streaming and studio assets would vanish, to be housed within the dominant streaming platform.

“Netflix would become the undisputed global powerhouse of Hollywood beyond even its currently loſty position,” according to BofA, with a “content moat” that no stand-alone streamer could touch and combined efforts accounting for more than a fifth of U.S. streaming.

Currently, Nielsen data places Netflix at roughly 18% share of total TV streaming viewing time, with HBO Max (WBD) contributing another 3%. A combined entity would far exceed other competitors like Disney (11%) and Amazon Prime Video (8%). Only YouTube (28%), which many argue has become Netflix’s true rival, would retain a larger share size.

BofA also predicts Netflix would continue to offer Warner Bros. films via theatrical distribution, which has been a controversial subject for years for the big-red streamer. Co-CEO Ted Sarandos has been in a long-running cold—and sometimes hot—war with theater owners over his refusal to play ball with wide releases. Netflix has acquired some boutique theaters in New York (the Paris Theater) and Los Angeles (The Egyptian), where it airs its prestige, Oscar-favorite movies, but it has not played ball with wide releases. The first major crack in this strategy may be Greta Gerwig’s forthcoming Narnia adaptation, but Sarandos has insisted that is limited to IMAX releases only, an event-ized business model Netflix has replicated with its first foray into sports programming, the Christmas Day NFL games. Hollywood watchers like Puck’s influential Matt Belloni have questioned whether Narnia is some kind of tipping point, and a WBD acquisition would surely be a step deeper in that direction.

The other birds

The second and third “birds” relate directly to Netflix’s competitors. The report notes that for midsize legacy media studios/companies, competing with Netflix’s unit economics or the ecosystems of large tech players like Amazon is increasingly difficult. An acquisition of WBD by Netflix would be “existential” for both Paramount Skydance and NBCUniversal (NBCU), effectively solidifying Netflix’s powerful defensive position.

By acquiring WBD’s studio and streaming assets, Netflix would significantly hinder the global scale aspirations of both Paramount+ and Peacock. The BofA team noted Comcast, in particular, is at a “critical juncture” because it is preparing to spin off its declining cable networks into a company known as Versant (a strategy also being pursued by WBD), while it is contending with a streaming platform that both lacks scale domestically and isn’t available outside the U.S.

The BofA team did not discuss antitrust considerations or other factors that may sway the bidding for WBD. Paramount has reportedly been pursuing WBD with a single-minded intensity for close to a year, and its controlling Ellison family has close ties to the White House, with Oracle founder Larry Ellison a power player as one of the world’s richest men and a major force in AI and technology. Ellison was one of the key names, along with Rupert Murdoch and Michael Dell, who emerged in the group controlling the U.S. arm of TikTok. A Paramount run by his son, David Ellison, who recently moved to reshape CBS News with the appointment of the Free Press’s Bari Weiss as editor-in-chief, would be a very different prospect with a new jewel in its crown.